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Could my 3y.o. daughter own 5% of a house in my trust under 18?
Comments
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If the OP has a second charge on the property wouldn't that make the 5% a loan rather than a gift and would a mortgage lender accept that money as part of the deposit?0
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It would be acceptable to some lenders and not others, hence;-If the OP has a second charge on the property wouldn't that make the 5% a loan rather than a gift and would a mortgage lender accept that money as part of the deposit?
"a few mortgage lenders won't have a problem with it from the ex's POV"
as it's her mortgage lender we're talking about here.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks everybody for the flurry of responses.
I am not familiar with the second charge concept :?
By googling, it seems to direct me towards second charge mortgage but I cannot seem to find relevant information about an individual providing a "second charge" to another individual.
Would that be equivalent of the 5% of the house value and therefore, should the house was sold, the 5% would be worth 5% of the sale price?
Would such "Second Charge" be arranged through a solicitor?
J.0 -
Her lender will have a first charge (mortgage) over the property to secure the home loan.
You have a charge over the property for your 5%. This means when she remortgages or sells, you get your 5% back before she would able to realise any proceeds.
The only potential issue is if she defaults on the first charge. The lender would get its money back and if there was nothing left, you would get nothing. Your second charge ranks behind the lender's first charge.
You would have the charge drawn up by a solicitor. She would need the approval of her mortgage lender as I mentioned and no, I have no idea what a solicitor you might want to use might charge...I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
? Voluntary payments are completely recognised by the CMS
this is a loan, which wouldn't be recognised for that reason.
As what?
Exactly as it says on the tin, voluntary and therefore exempt from any potential assessment.
The OP is potentially exposing themselves to a lot of risk. That was my point.0 -
What is your overriding concern here is it that you want to leave something for your daughter in the event something should happen to you or is it just that whilst putting up the money for the house you would rather not be involved, so as to access the RTB scheme.
If the former then surely a will is the easiest way to do that and if the latter then lend the money to your ex, but take a charge on the property, then you won't be involved in the mortgage and free to pursue your own mortgage via RTB.
Incidentally your charge on the property would usually be for the fixed amount of the loan as per a mortgage, not sure if your charge could be for an equity stake, but I'm sure someone else could clarify that. Maybe if that is necessary some other form of legal document could be drawn up.0 -
As what?
Exactly as it says on the tin, voluntary and therefore exempt from any potential assessment.
The OP is potentially exposing themselves to a lot of risk. That was my point.
Not at all.
Most cases these days are on a voluntary basis!
The CMS doesn't even get involved if the NRP is making 'voluntary' payments.0 -
Not at all.
Most cases these days are on a voluntary basis!
The CMS doesn't even get involved if the NRP is making 'voluntary' payments.
Indeed. I think we are at cross purposes here. I was referring to previous CSA rules where any voluntary payment was not considered as maintenance. Apologies.
I'm still perplexed as to why the OP sees fit to help buy his ex a home.
Madness.0 -
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To be honest, I have no idea
I am just trying to be nice for my daughter, albeit everything that happened. I guess I am concerned to end up going all the way with a solicitor/court as I cannot afford but to an extent, nor can she.
However, the more I think about the fact that she opened a CMS case against me despite the monthly payment, the more I think I should stick to the legal approach and if she wants part of my deposit to be in trust, then she should take me to court.
I am really struggling with deciding what is right or wrong and what I should be doing next
J.0
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